IRAs have become more popular due to the current stock market volatility. To take back financial control, many investors find that portfolio diversification gives them a little additional peace of mind. They are quickly discovering that self-directed gold IRAs offer a beneficial way to save for their retirement.
A self-directed IRA (SDIRA) is an alternative asset investment option.
With SDIRAs you can invest in:
- Other precious metals
- Mineral rights
- Promissory notes
- Real estate
- Water rights
An IRA that is not self-directed is managed by a brokerage firm, bank, insurance company, or other financial institution.
You, the account holder, manage your self-directed IRA. However, you must have a trustee or custodian, such as a banking institution or other financial organization administer the account.
Self-directed Gold IRAs
Self-directed gold IRAs are accounts for investing in gold metal, typically, gold ingots and bars (collectively called bullion), bullion coins, and gold coins.
Benefits of Investing in a Self-Directed Gold IRA
Investing in a self directed gold IRA is for everyone. According to the experts at Golco, “Investors do not need to pour all their assets into a gold IRA, but simply moving small percentages of investments into precious metals can reap long-term benefits.”
Gold IRAs enable account holders to:
- Coast through stock market instabilities
- Create a more diversified portfolio
- Enjoy the same tax advantages as Traditional IRAs
- Soften the impact of investment risks
The Role of a Self-Directed Gold IRA Custodian
A self-directed gold IRA custodian’s role is to administer the investment account. Even though a bank, insurance company, or brokerage firm can do this, you may want an expert gold IRA to service your account.
It’s best to trust a firm that keeps updated on the laws about gold IRA accounts.
An expert gold IRA firm:
- Can advise you on how to rollover your 401(k) assets to a gold IRA if you leave your employer
- Has experience investing in precious metal investing on a daily basis
- Keeps your investments secure and out of the penalty zone
- Understands government regulations on gold investing
Purchasing IRA-Eligible Gold
The IRS determines the eligibility for IRA gold purchases.
- A custodian must hold the gold IRA
- Contribution limits for IRA-eligible gold are the same as a Standard IRA
- IRA-eligible gold must have a purity fineness of .995 or 99.5%
- You can put your own gold in a gold IRA. (You must open a gold IRA first and buy gold to put into it.)
Know IRA Contribution Limits Before You Invest
By law, self-directed IRAs have required minimum distributions (RMD) for precious metals. Other regulations apply as well.
Recent changes to the Coronavirus Aid, Relief, and Economic Security Act (CARES) include:
- Qualified individuals can borrow more from their retirement plans.
- Waived for 2020 are the required minimum distributions (RMDs). This includes people aged 72 and older, IRAs, 401(k)s, and 403(b)s.
- For qualified individuals affected by COVID-19, the 10 percent penalty is waived for early withdrawals of up to $100,000. Also if your dependent, your spouse, or you are diagnosed with COVID-19, you qualify. Financial hardships due to reduced work hours, no childcare, job loss, or being laid off of work qualify you as well.
The Easiest and Safest Way to Start Investing in a Gold IRA
Here are the basics of investing in a self-directed gold IRA. Before you act, seek assistance from a self-directed gold IRA expert for specific actions to take for your individual situation.
- Select either a Traditional gold IRA or a Roth gold based on your investment goals.
- Specify how you will fund your gold IRA. You can use cash. Otherwise, consult with your tax advisor to see if it’s allowable to rollover funds from one of your retirement plans or transfer funds from one of your current IRAs.
- Pick a gold SDIRA custodian that is qualified, knowledgeable, and experienced with IRS regulations, and precious metal investing.
- As you fund your account, work closely with your custodian to adhere to IRS regulations. You’ll want to avoid tax liabilities.
- Choose your gold bars or coins based on the IRS gold-eligibility laws. Don’t get fooled by counterfeiters. Buy from gold dealers with 5 plus years of professional experience. If you buy coins, each mint is recorded when it is produced and this fact should help you avoid being taken.
Self-directed gold IRA investing is life-changing. It can give you more sanity and serenity in today’s uncertain economy.